Budget 2010: what it means for Malaysian motorists

Our PM Datuk Seri Najib Tun Razak has just revealed the annual budget for the year 2010, which is his first since taking office on April 3rd 2009. The RM191.5 billion budget would be the final budget under the 9th Malaysia Plan.

The Government expects the economy to grow by about 3% next year. The premier revealed that the budget for 2010 will focus on the ‘rakyat’ and aims to turn the Malaysian economy into a high-income economy.

Apart from unveiling various plans and measures to further improve the overall economy under the budget that is themed “1Malaysia, Together We Prosper”, the PM also briefly spoke about the local automotive industry and issues that relate to motorists.

First of all – one of the most important things for motorists – the combustible stuff we put into our cars so they can move. The Prime Minister says the fuel subsidy currently given to the public is being utilized by people who don’t deserve the subsidy.

The Government plans to introduce a fuel subsidy management system to determine the eligibility of a citizen, to find out whether she or she is eligible to enjoy the subsidy. The system is to be implemented in early 2010 and will incorporate the use of the MyKad. We’ve already saw a potential vendor demonstrating their ePetrol system at the WCIT 2008 (picture above). Not much other details regarding this was revealed.

There will also be a implementation of a new insurance and Takaful scheme for motorists. According to the PM, right now the structure of the motor insurance scheme is rigid (premiums are fixed) and fails to take into account rising business costs and claims. So in mid-2010, a new system will be introduced that will include an affordable ‘basic’ insurance and Takaful scheme.

The premium for the insurance will be figured at an ‘appropriate’ level and will be on par with the level of coverage. The scheme will provide mandatory coverage for bodily injuries and the death of a third party. Policy holders will also receive their compensation expeditiously without delays. I have a nagging feeling that this means the cost of entry to get a motor insurance policy will be low but to get the same amount of coverage we enjoy now, we’ll be paying higher prices.

Also announced is a RM10,000 price tag for an Open AP (Approval Permit). The change will be implemented on January 1st 2010 and a portion of the proceeds will be channeled to the automotive sector of Malaysia’s “Dana Pembangunan Bumiputera”. Four years ago in 2005, a total of 17,526 Open APs were issued. If the figure is used as a gauge, the Government can potentially earn over RM175 million. I wonder how the grey importers will deal with this new cost to them – will the buck be passed onto customers?

There was nothing revealed on the National Automotive Policy review in the Budget so we’ll have to continue waiting for updates on that issue.

Harvinder Singh Sidhu thinks there's nothing better than Formula 1, not even sliced bread. Having written about cars since 2006, he plunged head first into the industry out of a passion for all things four-wheeled and everything in between. The F1 enthusiast has been following the sport since 1999 and has been keeping up with it since. In between races he keeps himself busy as the host of the Driven motoring TV programme and as our version of the Joker.

No it does not mean anyone can apply for an Open AP now. It just means current AP holders will have to pay for them. Previously, APs were free for Open AP holders. This information is of course pending further clarification from MITI as the Budget speech is quite simplified.

1_ to look into profit so that goverment can earn the same or little so their pocket will fill with money.

2_ the find the way to charge us by lowering the car price and charge at other places.

3_ To PROTECT POTONG again'

4_they will not Liberalism i dont think so they will, imagine their tax when down money earn less, this the main reason they want to study and study and study untill the end they say no liberalism and you need to pay and pay more tax

5_and last what happen to the AP, say abolised and now RM10,000 again.

Well..at the moment i wont say this budget is good or not. I think we should give the benefit of doubt on this budget. Sounds differrent from previous budgets…hhhmmmnnnn ie using MyKard to purchase petrol is very good idea….maybe lower car premium for average malaysians….well, need to 'digest' this budget first…

Now 10k each for open AP … well well well i'm sure the car sellers would pass the increased cost to the prospective buyers …u think they 'd absord the price? In short , the price of CBU cars would increase much more at the expense of us and gomen raking more ..silly move ! Guys better delay car purchase until the economy shrinks or us shrink

I can already see how this e-petrol can be abused.. all the johor petrol station operators will just swipe they're own mykad, charge the Singaporeans a lil extra and make a quick buck… hope they think of that and find someway to prevent such things occurring…

PS: AP issue will never be settled so long "certain people" need to be fed… the thing i dont get is, how they say AP's are supposed to benefit us bumiputera's, cause all i see is a few people getting fat while the rest of us actually have to pay more for decent cars… so how does it benefit us?

I dont mind to pay more for the petrol at least we know what we spend for but as for the car is too horrible, this means the G just take a lift on us, by passing so many hand it cost much and much, how to say thier so call "liberalism" is it a joke?

Beside budget, turning Malaysia to 'high income' country. Actually, i lose hope on this, coz during our highly rhetoric PM Dr. M, he always against increasing salary of public sectors. He also put so much barriers to ensure sectors in par with Singapore…in essence he failed us during his terms…why should we believe him now? He loved his cronies so much that for the rest of us, nothing more that 'nyamuk' that 'urinate' him much. Since, the 'other' party is making inroad, NOW he mention about turning Malaysia like Dubai! Forget it! Oil reserve wont last 5 years….you think we dont know the fact about Malaysia oil reserve? Hope Malaysians are not FOOLED again….

Aikss~~~still Delay, have to delay until what time? If this Prime Minister would not want to do it, then wait until another Prime Minister, and we wait another and we wait another Prime and wait and wait and wait……… Until we all died and all the former Prime Ministers' died and all their bones were turn into ashes and gone with the wind, and yet, the STUPID AP is still there…~~~!!! Stupid Brainess AP Holder, and AP. YEAH~!!!! HUH~

Paul, i've heard that if a person is a Malaysian, he or she is entitled to ONE AP in a lifettime and can be issue to a person whether or not a bumiputera or non-bumiputera. Is that true? or anyone can have any idea?

Common la, as long as the people in power is making $$$$ for themselves, do anyone think that they will create policies or laws that will take the $$$ away from them.

All politician cannot be trusted one la. They only have their own political interest. Everything they implement have hidden agenda one.. Ya, got policy to help certain group of 'rakyat' but at the same time, how much they 'untung.'

As for those who dream of getting cheaper imported car, continue to dream on la..

Hong, u can only have One AP if u studied more than 1 year oversea… Is like bringing ur car back to here without having to be tax. But there is a condition, if i not mistaken u will not be allowed to sell ur car for 5 years and to prevent u from making fast money by selling it…

Anyway i found no sincere from the BN Gov that they still want AP which they promise & promise again to be abolish… Malaysia Boleh…

Regardless what good motives the gov't has, no one will trust them, given their horrid track record.

Save 15k jobs but tax the whole 30million people for it? I buy a car (yes, even local proton) it is not only me that get taxed, the money I pay for tax means I take a loan for the tax, and also means I have less to spend on my kids, in effect taxing them as well.

before proton, AP and all that nonsense, malaysia has been doing well already. You have got to be kidding me that with all that natural resource and skilled labour Malaysia can't attract enough FDI, and massive GDP growth to offset some capital outflows when we buy CKD'd non malaysian marque?

25 and drive a 6 series? What business? Not unless one with strings pulled by daddy or leached from some so called special bumi development fund? Granted, the world doesn't play fair, but flaunting it is immature and foolish.

Do Proton really make up to the standard i know what you mean but do you this piece of junk doesnt coz that much either you drive BMW or Proton is still a metal. In Thailand there are no so called national car but and yet still provides job's, why not just let it stand alone. Again do Proton really coz that much of value RM 40k? Untill today Proton still can't managed to create their own car and still rebadge for the Waja, and i Know u managed to get your daughter a 6 series by the aged of 25 who really know how it come from but majority Malaysian force to use low quality car, do you ever sit on a Proton? Guest not, keep protecting a crap doesnt mean you earn from it where it already consider a crap why not just get a new way to improve new idea to get more people in work, you are just talking about job not Proton no job how ridiculous is it. And does your 6 series coz that prices.

We do not have top brains to manage our country,only retarded and morons who only know how to keep on taking money from our pockets.Give another 20 years we will never be a developed country because of spoon feeding mind and protected policies. Just as the Chinese saying, get him a wife but also have to ensure she give birth to a Boy.

Born stupid is okay as long as you are willing to learn,you will still reach there. But if you are lazy and relying on helping hands, you are better off dead then to live as it is a torture for others following you.

u said that u didnt gave her money but indirectly u have supported her through education which in the "rich" citizen perception that they should provide the best school, college, university so that they could find the best work out of there to success in their life…

i never see a people driving a BMW 6 or whatever luxury car in such young age without their parent support…

Those saying Proton and Perodua must be protect coz these two provide a lot of employment is an outdated tactic oledi. Malaysia has the biggest advantage to be the leader in automotive industry in Asia but you knowlah the nutty PM that time. When your cronies begging you to protect them so the exPM make rhetoric speeches to fool us again. Imagine if we allow TOYOTA, GM, NISSAN, etc to fully manufacture their cars here, we have tons of highly paid people working in automotive sector. But then again, you and i know lah, IF ITS DOESNT SERVE THE SMALL GROUP OF POLITICIANS FORGET IT. As for those who say make business to make more money, then tell me…out of 100, 90 people fail in their initial business. So you think so easy to set business?

I think using the MyKad is one of the ways to check for Malaysians using it. But then, foreigners can just borrow local mycards.

Another solution is that rate based on number plates. Local plate=subsidies. Foriegn plate, no subsidies. But then people will just forge number plates.

I don't really know how the gov will want to tackle this problem. Having specific card-to car works, but then what happens if non owners drive it? No card-car so doe's not work as well.

So what happens is now people buying AP's need to form out an extra RM10k. So expect the cars to cost more by RM10k in future. Correct me if I'm wrong.

The way I see it, the gov has no idea what to do with the automotive policy. AP's will be there forever. Tax will be there forever. Make sure proton survive.

I bet that the new NAP will be a long document of nothingness, the same as the old NAP. Better take a nap than be hopeful about it. Look at it this way, if the new NAP can give you Rm10K discount for imported cars, the corst will be wipe out because of the new RM10K AP thing. But, becauuse the NAP will not give huge discounts, so you are actually paying more for the car in future. Gov get more in tax.

Belive me, this is what the new AP and NAP will be like. Make sure the AP is confusing enough so that public don't understand than make NAP give cuts and tell the wold that its better. So people will notice that.

It looks like the GOV is simply announce a last minutes idea regarding this new AP policy due to too many question marks for the actual condition…..hope i get it wrong with this…..it sounds a bull shit for me after all.

I think Kim is right… govt must protect their own investment.. futhermore if something happen to this proton and perodua its more then 20k jobs but will drag also all car dealer/workshop/user since no part for their cars…/car accesorries like Brothers others and so on. its like domino effect. It not just our govt. Even USA also protect their GM and so others like korea, If u got money than buy a good car like honda, toyota, merc and bmw. my opinion is proton and perodua is a good car for its price. u can see alot of 10 to 15 years old saga and kancil in our road. still going great.

To fix certain assumptions by people above, actually Singapore is not using a high income economic model, even though their income is high, it is still labour intensive instead of creative intensive as is the norm in high income model country. This can be seen where singapore import a number of 1/3 of their population to work as cheap labour from PRC to support their business model. There is a lot of complain by Singaporean them self about the approach.

I read that part but really dont have much to comment. Insurance companies are already trying to "force" people to take up additional policies for people that take 3rd party coverage, so this is just the government legitimizing it.

The future looks bleak really. Really expensive car taxes, high fuel cost, and now the possibility of high insurance, the last item that is still "cheap" for us.

wake up! this is not about protect proton or P2. This is Malaysia income, with or without proton, the tax will hardly to be lowered. Only if malaysia can manage to find other sources of income but do u think malaysia boleh?

For so many years and until today, malaysia can survive because of petronas and worst comming 5 – 10 years, malaysia will be net importor for petrol, which mean we import more petrol then we export.

Uncle Kim, dont you ever ask you daughter how she got to set her business and at very young age can drive a Beemer? It seems to me you are blinded with materialistic things that you didnt not check whether she ACTUAL RUN A BUSINESS OR SHE IS THE BUSINESS. Come on uncle Kim, nowadays, Datuks or whatever pamper their mistresses with expensive toys. We not ignorant ones, we surf internet can see a lot of news or photos of our Datuks activitiies. Also open secret that our so called VIP are hornies. Money $$$$ rules uncle….Dont let the news get to you last ah….

The new fuel subsidy program is actually called National Fuel Subsidy Scheme. Supposedly to be in effect on 1st Jan 2010 but it has been delayed. Under this scheme, we will need to validate our subsidy percentage via MyKad and our subsidized amount (or %) will be based on our salary income. Since this is a high priority national-wide project, I believe it may take months before this takes effect since it involves JPJ, JPN, petrol companies and stations as well as banks.

Now, the question is, how do they justify our subsidized rates? They will only have our basic income figure, but how about those with low-to-mid incomes but ridiculously high allowances? Malaysians have a pretty huge gap between the lowest and highest income..so what method of calculation will they used? I can already think of the two mechanism that they will need to take into account for the calculation – our income as well as the current floating mechanism used to calculate subsidized amount based on global oil price.

I just cant wait to see how this scheme is gonna work out without trouble..What are your thoughts guys?

yeah paul..i read till the end to see views about motor insurance but all i got was ranting about how bitter people are not getting good car..blame blame blame p1, blame blame blame tax..for god's sake get a life..work hard and earn yourself a good car..

u said that u didnt gave her money but indirectly u have supported her through education which in the “rich” citizen perception that they should provide the best school, college, university so that they could find the best work out of there to success in their life…

i never see a people driving a BMW 6 or whatever luxury car in such young age without their parent support…"

I will double that last sentence…

also "Proton or to smaller extend, Perodua… NEED protection

because this two combined are providing job for Malaysian

people in excess of 15,000 pax."

So ar u suggesting protecting 15k pax and above, and disregarding the citizen of malaysia?

Do you really know how to manage at all? Even if its your own company? So let me rephrase that with regards when dealing in business, So you will protect say 10 ppl in a company and disregard the rest of the employees?

I will congratulate you and your business if you manage to survive without protection with this business method…

Your articulation on protectionism seems very biased. Instead of thinking deeper, you choose to reject a larger net of population in favor of a small group of minority. The amount spent on our national cars in Malaysia is not proportionate to the price tag you can buy (after conversion) in Overseas. Worst, do you think the amount of price you paying for can be comparable in terms of safety with a normal Toyota car? So do you see that protectionism helps our national car companies at the expense of our people who can't afford a beemer and those low earning people with less support to open a business or only can live happier if tomorrow or the next month still stay employed? I suspect that your argument is based on yourself , your purchasing strength and your own capabilities disregard of many people least fortunate.

I'm irritated with your exhibitionism to portray how successful your daughter is in her young age. Of course, congrats having a successful daughter but bare in mind, you should never you use your daughter's success to generalize and stereotype those who couldn't achieve the same feat as LAZY or NO BUSINESS SENSE. THAT IS AN OUTRAGEOUS REMARK and also Thank you for your INTELLIGENT advise on teaching the forum contributors here what is THE RIGHT thing to do. Ya, i respect freedom of speech but sometimes when you exercise it without much thought, it can be very DAMN RUDE.

We are not proud of Proton, it is just a crap made by recycled milo tin. If Proton collasps, just let other car companies come in and build manufacturing plants. Look at Thailand, it is the detriot of Asia. The automobile industry supports not only a mere 20k ppl, but way more!!!!

All talk rubbish here..u want a beamer..save your money and buy one later..who cares..u dont like P1/P2..dont simply talk like u are an economist..u dont like Tun M..dont bash him or other people due to u cannot afford buying an imported car..what is your contribution to the country comparing to him? Very little..stop nagging all this and that..

wait for the NAP to come out..print it..read it properly..understand it..digest it.. (not posting comment here asking whether it is good or not to you)..only then give your opinion..(not your rubbish talk!)..if you dont think the NAP is meant for u..then stop wasting your time here..stick with ur old car..nobody cares..duhhh

if want to hav want they want double your effort even triple…but please don demonize/humiliate other people…they work so hard and u all simple say mistress la, corrupt la, parent la, race/ethnic, gov….wat if u sit in their shoes wat u feel …i feel jealous people who success that make me want to be like them

Uncle Kim…sorry to say…u just converted many of us to the 'other' party. U remind us of exPM us FOOLED us for too long. Hope ur daughter will be okay, who knows, whoever sponsor her will lost the next general election. WE LAZY MALAYSIANS MAY HAVE DEMOCRATIC BUSINESS OPPORTUNITIES GOVERN BY BETTER PARTIES…

Talking about PM pulakkkkkk…aiya..these peeps always listen to other craps..if u see wit your own eyes what he do..only then u judge him..dont simply put blame to other people without having a solid proof..i like to read in this blog..but sometime the comment here is off topic..filled with people nagging and bashing other people here..

Paul,

About the motor insurance, can u briefly explain what is the outcome from the AP matter announced in Bajet 2010. I cannot found any clause inside the Bajet 2010 speech regarding the motor insurance related to the AP. PM only mention about introducing a mandatory basic insurance in the middle of next year (Clause 74).

Pm sure suck..what he care is helicopter and submarine..he don’t give a shit about car..U all think pm care about malaysian people..??He care only money….

…hmm..anyway..Lingam case closed already..Tun M already prepare to defend himself (read his blog!) if he go to the court regarding Commission's report on the lawyer influence over him in the selection of judges..no need to butt in other people business..

I personally do not fully agree with the recent budget on automotive industry. I think car industry is alway one of a the key cornetstone of a country economy, especially for Malaysia (with below average national public transportation).

on the protection to proton and P2, there are many argument already but i think it is important to protect but eventually we need to measure the result against a timeline (what success, when). Having just one majot market would not be sustainable for one car manufacturer nowadays, so eventually, with the protection, tax money, higher absolute margin, etc would not really work because in the end it will not bring us anyway. National car is artificially cheap or affordable but it is not at all if you compare what you could get if the market is slightly liberized. We would be able to have slightly better car, perhaps safer car, perhaps more comfortable car, etc.

It is not about hong long a proton or P2 car can be used, 10-15 years or what, but at what condition and what safety level. I had a 20 yr old proton and it is still working, but that is not the point that Proton or P2 is good or not. The basic fundamental of privatization is to make profit , now proton and P2 is making profit out of policy and not out of their product, service, etc.

We'll see who will get the contract for MyKAD e-petrol system. I think the cost will be higher than the subsidy instead. MACC and AG please be prepared to open another can of worms (or maybe a barrel of snakes). Remember PKFZ. If it is implemented, wait to see those uncle who didn't own cars 'loan' their MyKAD for fuelling purpose. For the insurance, it will be higher than now I think. All occupants insured? Even no road tax + insurance vehicle still make it on the road. How to claim from this event? Better think deeply.

I know a certain 25 years old guy who own a Beemer without any help from his parents… working really hard as and auditor of a financial firm and sell insurance… one and a half year doing those… he bought himself a new beemer… ouh ya.. no his parents r not rich…

The non-national cars here are artificially priced higher to make national cars look cheap. National cars aren't cheap given the level of quality its in, and comparing it car prices in other countries.

For fuel subsidy, they could do it via the road tax structure, those driving 2000cc cars and above – increase the road tax 3 to 5 times. Bigger engine vehicles will have to pay higher road tax.

The income tax for those earning RM100,000 above should be increase as well while those below it should be reduce.

This is one country where the strong are protected while the weak are walked on.

Once I spoke to a VW sales person when I was looking to buy a Passat and remember him telling me that AP cost them RM 50K and that is passed on the customer, that that whay the passat was priced above RM 230K. Very familiar bullshit again I guess, get AP for Free and sell it to make some quick buck.

In 25 years in involved in business, NEVER ONCE i get or try to get a project

of any kind from a RULING GOVERNMENT.

Some i observed don't know what A WORD 'government' truly means. I don't

give a squat which political party GOVERNS the country… may it be BN or

PKR… what matters to me and a lots of my businessmen & women circle is

the ruling government lay a strong policy to protect MALAYSIAN.

Malaysian put me to where i am now in Malaysia. Malaysia is the country

that my daughter started her Office Decor to serve Malaysian & in return

Malaysian give her enough profit to own a 6 series & more.

In my original post/comment was to highlight the NEED of these people

to stay in job to stabilized the country economy, and by economy it's

deeper than buy and sell, people!

I dont want to go deep in discussing economy since this will take forever

for majority in here to understand, but just one example, USA spend

US3,000,000,000,000 (that's trillion) on BAILOUT this year alone for what? YES, some in here get that right… because it's a NEED to protect the

workers to STAY in JOB!

When people are not in job, the micro & macro economy will go south and u can only dream the non-local conglomerates will not retrench to cut cost. Just look at how many Toyota assembly plants in US have been shut down!

I can go on and on and on… but i know with majority of keyboard warriors in here never try to understand what message i try to convey, i'l stop here.

To vjay vtec,

just tell me where is your workshop, and i'l try to find a free time to drop by. I cannot guarantee anything but if you're really sincerely i can show you the right path to venture in a good business. Remember, a good businessman not necessarily will be rich, but a good business will.

"Subsidised fuel is currently enjoyed by all motorists, including luxury vehicle owners and foreigners, which is a strain on Government finance. To ensure subsidies only benefit targeted groups, the Government will implement a fuel subsidy management system in early 2010. This is a more people-friendly system utilising MyKad and the existing infrastructure. This approach of providing subsidy only to the targeted group will also be used for other commodities."

What did PM mean by "luxury vehicle"? Would I have to pay higher price for fuel if I own a 10-15-year-old 2nd hand Merc/BMW? Just curious because we know that our gov are stupid sometimes when it comes to implementation.

Still remember the BN govt given RM to motorist last year( oil price increase). That's WHY , now the govt try to collect back all the RM that was given to rakyat. They (BN vip's) will start to increase everythings from now on…

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